Srijana Rai of Dharan had to drop her plans to buy new gold ornaments for an upcoming wedding. She was hoping for the precious metal price to climb down. The price instead kept inching upward indefinitely. Gold prices have been continually rising for the past few months. On February 24, it hit an all-time high of Rs 80,300 per tola (11.664 grams). A day before, it was traded for Rs 78,800 per tola. On February 21, it was going for Rs 78,100 a tola.
“I am scared just to hear the gold price,” says Rai. An increment of Rs 2,200 in just three days was unexpected in the gold market.
Narendra Kumar Gupta of Riddhi Siddhi Jewelers says his business has been suffering for past six months. “Due to the unprecedented price rise, few people can purchase gold these days,” he says. “They now buy only if they are compelled to.”
Nepali women have traditionally considered gold a necessity during religious ceremonies like marriages and bratabandhas. “Only those who have such events in their family are buying,” Gupta laments.
When it was cheaper, people bought gold to add to their collection of golden ornaments or as a safe investment. Those incentives work no more, according to traders.
Gupta recalls that his average customer used to buy as much as five tolas of gold until last year. But a typical customer hardly buys even a tola now.
As per reports, gold prices have surged globally, most recently due to the coronavirus outbreak. According to a Reuters report, “Gold price soared as much as 2.8 percent on February 24 in international markets, the highest in seven years. Investors are worried about global economic growth in the face of sharply rising coronavirus cases outside China.” Reportedly, the virus has spread to at least 29 countries and territories.
Mohan Kumar Biswokarma, president of the Federation of Nepal Gold and Silver Dealers’ Association, confirms that gold prices have surged in Nepal due to global conditions. “Gold traders are struggling just to keep themselves afloat,” according to Biswokarma. “If the situation persists, it is hard to guess what will happen to our business.”
Kamala Sharma from Pokhara, who hasn’t been keeping tab of the price for the last few month, was surprised when she went to a gold shop at New Road. She wanted to make a golden ring for her son. When she first heard the price, she thought the shop owner was trying to cheat her, so she checked at the next shop. “It is unbelievable. I was shocked. Why is it so expensive? We ordinary people cannot buy it.”
According to traders, gold business has gone down by about 25 to 30 percent in recent months. But while the traders are struggling to sell gold, people who are hoarding gold are rushing to sell. But as there is little demand gold traders are reluctant buyers.
Om Senchuri, owner of New Dibya Gold and Silver Shop, also at New Road, reports many people are taking out gold from their lockers and coming to his shop to sell. He thinks the price will go down only after the coronavirus crisis is resolved.
On a Facebook post of Riddhi Siddhi Jewelers, one Sweekriti Kafle writes: “I am thinking of selling all the gold I have.” The shop puts price and related information on its Facebook page. On the same post, Sani Ghising Lopchan comments: “Poor people like us should stop dreaming about wearing gold from now on.”